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News Article

“Chocolate” Car Decree Held Back

By Alfonso Núñez | Fri, 01/07/2022 - 16:02

Nearly three months after President Andrés Manuel López Obrador announced a decree to legalize illegally imported “chocolate” cars in the country, there have been no consultations with the automotive industry to determine the logistics of the decree, said Guillermo Rosales, Executive President, Mexican Association for the Distribution of Automobiles (AMDA).

 

The legalization of “chocolate cars” along the country’s northern border states was part of President López Obrador’s plan to aid those who do not have the means to afford a new or used vehicle but need access to transportation nonetheless. The decree then expanded to include other states such as Michoacan. The Ministries of Hacienda, Economy and Citizen Security and Protection were set to determine the requirements for vehicles to qualify for legalization under the decree, which would come at a prize of MX$2,500 (US$122.32) per car.

 

Immediately, the decree caused controversy within the automotive sector, particularly due to its timing. A long-awaited recovery from the 2020 sales slump was cut short early in 2021 due to the semiconductor shortage, which has no official end in sight. Industry experts, such as Rosales, were quick to voice their concern regarding the impact of legalizing at least 18 million “chocolate cars” on automotive sales.

 

Because of this, the federal government and the automotive industry need to collaborate to determine the requirements for the to-be-legalized cars regarding vehicle age and carbon emission. Through a compromise, the president’s goal of aiding Mexican citizens and the automotive industry’s recovery could both be achieved. However, as Rosales points out, neither of the three ministries have contacted Mexican automotive industry representatives to do so.

 

“It is a decision for our civil servants. The Minister of Governance, the legal advisor and the Minister of Economy need to hurry in order to establish a mechanism within the states so that the regulation is not held back,” the president said during his daily press briefing yesterday.

 

The president also said that regularization fees could be used by state governments for local spending, as they will not be collected by the federal government. This would allow each state and municipality to spend the funds in the areas they deem most useful for their citizens.

 

Not a single car has been legalized since the announcement. The delays come as a result of the “fourth transformation” in the country’s political processes, the president assured, but governmental authorities are reviewing the issue and will begin legalizing “chocolate” cars in the near future.

Photo by:   Unsplash, Andrew Winkler
Alfonso Núñez Alfonso Núñez Journalist & Industry Analyst